The Political Economy of Campaign Costs: A Comparative Study of Elections Across India

Abstract

Expensive election campaigns undermine democratic processes by fostering corruption and political inequality through the disproportionate influence of wealthy donors. Yet, due to methodological limitations and Western-centric research, we still know little about the extent and causes of campaign expenditure variation. Our study addresses this gap by examining the determinants of such variation in four Indian state assembly elections—Andhra Pradesh, Haryana, Maharashtra, and Odisha, in 2024. We adopt a mixed-methods approach. Twelve researchers conducted ethnographic fieldwork, shadowing candidates to observe funding and spending practices. In addition, we surveyed 500 winning and losing candidates across 165 constituencies, asking them to estimate their competitors’ funding and spending. This innovative method avoids relying on the unreliable self-disclosures traditionally used in campaign finance research.Our analysis employs a comparative political economy framework, integrating the commonly studied incentives of politicians with the less-explored incentives of donors. We hypothesize that the discretionary power politicians wield over economic opportunities influences campaign costs. Specifically, we propose that local economies characterized by substantial state dependence and “rent-thick” sectors—such as real estate, natural resource extraction, and construction—generate higher campaign expenditures. We also consider the impact of informal political practices, including clientelism, rent-seeking, collusion, and the blurred lines between business actors and politicians. By examining these factors, our study seeks to explain how complex economic conditions and political dynamics shape campaign spending, ultimately informing a more nuanced understanding of electoral competition and democratic integrity.